VAT for Alojamento Local — the Article 53 exemption, the 6% rate and the Booking.com trap
How IVA works for AL in Portugal: the Article 53 exemption threshold, when you must charge 6%, and why Airbnb and Booking.com commission can pull an exempt host into VAT obligations anyway.
VAT — IVA — is where most Alojamento Local owners get an unpleasant surprise in year two. Not because the accommodation rate is complicated (it is 6% and rarely changes), but because of one specific trap: an AL host who is exempt from charging VAT can still be obliged to register for VAT, file returns and pay VAT on OTA commission.
This guide explains the three things that actually decide your position: turnover, the rate, and who you buy services from.
1. The Article 53 exemption
Article 53 of the CIVA (Código do IVA) is the small-business exemption. If you qualify, you do not charge IVA on your nightly rate and you cannot deduct the IVA on your costs.
You qualify when, broadly:
- your annual turnover is at or below the exemption threshold (€15,000 since 2025, after a rise from €13,500/€14,500 in earlier years);
- you do not have organised accounting (contabilidade organizada) by obligation;
- you do not carry out import/export operations that fall outside the regime.
For a single AL unit doing €12,000–€14,000 a year, Article 53 is normally the position. For anything larger, or for a portfolio, you will be in the normal regime.
On your invoices, exempt hosts must state the reason. The standard wording is "IVA – regime de isenção, artigo 53.º do CIVA". An invoice with no VAT and no exemption note is a defective invoice.
2. What happens when you exceed the threshold
The threshold is tested on the previous calendar year's turnover (with a pro-rata calculation in your first year of activity).
If you cross it:
1. You submit a declaração de alterações to the Autoridade Tributária, generally in January of the following year (or within 15 days of the fact when the excess is more than 25% of the threshold).
2. From the effective date you charge 6% IVA on the accommodation service (Continente; the reduced rate differs in Madeira and the Azores — 5% and 4% respectively at the time of writing).
3. You start filing periodic VAT returns — quarterly for most AL hosts, monthly above the larger turnover threshold.
4. You can now deduct input VAT on costs: cleaning, laundry, utilities, furniture, agency fees, software.
That last point matters more than people expect. Hosts who refurbish, or who pay a lot of commission, are sometimes better off in the normal regime than fighting to stay under the threshold.
3. The rate: 6% accommodation, 23% extras
Accommodation itself is a reduced-rate service. But not everything you sell with it is:
The practical rule: services that are part of the accommodation package follow the accommodation rate; separately contracted services follow their own rate. If you sell a lot of extras, get the split right on the invoice rather than bundling everything at 6%.
The municipal tourist tax is not part of this. It is collected on behalf of the câmara and is not consideration for your service, so it is not turnover and does not carry VAT. Keep it as a separate line and out of your income.
4. The Booking.com / Airbnb trap
This is the part that catches exempt hosts.
When Booking.com (Netherlands) or Airbnb (Ireland) charges you commission, they are supplying a B2B service from another EU member state. Under the reverse-charge rule, the place of supply is Portugal and you account for the VAT — even if you are exempt under Article 53 for your own sales.
In practice that means an Article 53 host taking OTA bookings must:
1. Register in VIES and obtain a valid VAT number for intra-EU transactions (submit the declaração de alterações requesting it).
2. Give the OTA that number so they invoice you without their local VAT.
3. Self-assess 23% Portuguese IVA on the commission and pay it over.
4. File a declaração periódica for those operations, plus the recapitulative statement where required.
You still do not charge VAT to your guests. You are simply paying VAT on a service you bought from abroad. An exempt host cannot deduct that VAT, so the 23% is a real cost — budget roughly a quarter of your commission on top of the commission itself.
Hosts who let only through their own site, or only through a Portuguese agency that invoices with Portuguese IVA, do not hit this.
5. A quick decision path
- Turnover under €15,000 and no OTA commission from abroad? Article 53, no VAT filings, exemption note on invoices.
- Turnover under €15,000 with Airbnb/Booking commission? Article 53 for your sales, but VIES registration and periodic returns for the reverse charge on commission.
- Turnover over €15,000? Normal regime: 6% on the accommodation, 23% on separate extras, input VAT deductible, periodic returns.
- Multiple properties in one name? The threshold is per taxpayer, not per property — two €10,000 units put you over.
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